CLS Global, a cryptocurrency company based in the United Arab Emirates, has admitted to illegal activities after falling for a Federal Bureau of Investigation (FBI) operation.
The FBI created a fake cryptocurrency called NexFundAI (NEXF) to catch companies and individuals involved in fraudulent activities like market manipulation.
Acting undercover, FBI agents posed as fraudsters and asked CLS Global to inflate NEXF’s trading numbers to attract unsuspecting investors.
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CLS Global agreed to plead guilty to charges of wire fraud and market manipulation, as announced by federal prosecutors in Massachusetts on January 21.
According to the Massachusetts US Attorney’s Office's statement, the company must pay $428,059 in penalties and forfeit funds from accounts on platforms like Binance
The company is also on probation for three years and must file annual compliance reports with the Securities and Exchange Commission (SEC) to confirm it follows the restrictions.
During the investigation, the FBI found that CLS Global had been using fake transactions, known as wash trading, to inflate trading volumes artificially. This tactic made the NexFundAI token appear more popular than it was.
The company also used automated systems to carry out self-dealing trades on platforms like Uniswap
This operation, called “Operation Token Mirrors”, was launched in October 2024. Along with CLS Global, another company, MyTrade MM, and 18 individuals were charged across related cases.
Recently, the FBI stopped a plot to kidnap a Miami jeweler and steal $2 million in cryptocurrency. How did the case go? Read the full story.
